The work that Paul and Kaitlin and others like them carry out in Humboldt County takes several forms. One of Democracy Unlimited’s primary aims, says Paul, is to ‘begin a national conversation about the role of corporations within our democracy’. To this end, they run study groups in which local people come together to ‘read, think and talk about stuff they don’t know anything about’. That, says Paul, ‘is how this all starts – just reading stuff, thinking about it, adjusting your approach. It’s how I started. In many ways, re-thinking the entire relationship between corporations and people is mindwarp stuff.’ He laughs.
‘Reading and learning about this stuff fundamentally alters your consciousness in a way that most anti-globalisation activists think they get, but they don’t,’ he says. ‘It’s a leap. When you think about this in a fundamental way, your language changes and the way you look at things changes. It’s like moving from thinking that the world is flat, and if you go past a certain point you fall off, to thinking that the world is a sphere – that’s a fundamental shift, a thought-form shift, a paradigm shift. This one is as big as that, and yet it’s only about governance; it’s about moving from “The corporation is the primary actor in society, and we are merely stakeholders – workers or consumers”, to “We, the people, are the source of all authority, and we have the power to decide what role these institutions play in our lives and our communities”.’
This is not just talk though; not even just ideas. In a small corner of Humboldt County, now, it’s the law. In 1998, after a few years of running discussion groups, touring with workshops on ‘first steps toward dismantling corporate rule’, distributing newsletters and generally trying to stir up community interest, Paul and a group of allies decided to see if anything could be done to institutionalise their new take on corporate authority. Democracy Unlimited set up a spin-off organisation, Citizens Concerned About Corporations (CCAC), based in the nearby town of Arcata, where Paul was then living. Its purpose was to rewrite local law to try to reassert some of the people’s powers over the private corporations operating in their town.
Its weapon was the innocuously named ‘Measure F’, a local ballot initiative. Ballot initiatives are a curious remnant of America’s constitutional past which allow ordinary citizens to propose new laws. Any person or organisation can propose one – if they collect enough signatures in support, the proposed measure is put on the ‘ballot’ for citizens to vote on at the time of the next election. If a majority vote for it, it becomes law. Only twenty-four of the USA’s fifty states allow ballot initiatives; California is one of them, and CCAC was about to use it to its advantage.
Cienfuegos and colleagues drafted a ballot initiative for the Arcata local elections in 1998. Measure F, or, to give it its full name, the ‘Arcata Advisory Initiative on Democracy and Corporations’, called on the city council to sponsor two mass meetings for Arcata citizens entitled ‘Can we have democracy when large corporations wield so much power and wealth under law?’, and to establish an official committee, policies and programmes to ‘ensure democratic control over corporations conducting business within the city, in whatever ways are necessary to ensure the health and well-being of our community and its environment’. In a flurry of activity, they collected the 1,110 signatures they needed, got the measure on to the ballot, initiated a local debate about it and began to win widespread local support. On 3 November 1998, the people of Arcata went to the polls and voted, by 60 per cent to 40 per cent, in favour of Measure F. The first ballot initiative in US history on the subject of dismantling corporate rule had become law.
‘It was fantastic,’ says Paul. ‘People really began to ask themselves what role corporations played in their lives, why local shops were disappearing, whether it was right for corporations to pay politicians, why they had so little say in the role that corporations played in their town. For a while, all the talk in the bars and the shops was about Measure F, and about corporations in Arcata. Arcata is still a small town, but there are more than fifty giant corporations doing business there; Measure F simply said the people should be allowed basic authority over their activities. It struck a chord.’ The city’s mayor and many of its councillors supported the measure. Messages of support began to come in from other parts of the country. Cienfuegos was asked to give talks all over the US, and groups of people came together in other towns to plan their own versions of Measure F.
The two town hall meetings were held, and took the debate further. Today, the ‘Measure F Committee’ created by the new law is pushing forward that debate, discussing ways and means to reassert public control over corporate activity. It is currently drafting a local law proposing a cap on the number of chain restaurants in Arcata, and is trawling other states and counties to look at potential ways to reassert authority over corporations. All this, says Paul, is ‘helping people regain their sovereign attitude – something that has really been lost in America. People are starting to believe again that power really does reside with the people, and that they can actually use it.’
If it seems that Paul Cienfuegos and his fellow campaigners are exaggerating the threat posed by the power and influence of corporations, a brief look at the history of the USA might suggest otherwise. In many ways, that history is the story of a conflict between private corporations and public institutions for the right to govern America.
The corporation came to North America with the original British settlers.4 Corporations had existed in Britain since Norman times, but were usually non-commercial bodies – churches, schools, hospitals – which were ‘incorporated’ by the Crown to allow them to carry out certain tasks: by forming a corporation, the workings of such bodies could be simplified and legalised. Individual owners of corporations were not allowed to profit from their activities, and the Crown could revoke the charter it had issued them if they acted outside the strict limits it had set out.
Things began to change with the growth of Empire. Corporations – the Russian Company, the African Company, the Spanish Company and others – were chartered to seek out and control trade with other parts of the world. In 1600, Queen Elizabeth I issued a Royal Charter to the East India Company, which would later take advantage of its growing and unprecedented power to break free of its legal obligations and become the world’s first profit-making multinational corporation. Originally chartered to trade in India, the British East India Company became so powerful that it ended up governing most of India – running its own army, building infrastructure, controlling the food supply and dealing brutally with anybody who came between the corporation and its pursuit of resources and monopolies.
Meanwhile, in North America, the British government’s taxes, political heavy-handedness and refusal to allow its American colonies a political voice were tied up with the power and influence of the Crown corporations. The infamous Boston tea party, a precursor to revolution, was sparked by a tea tax imposed upon the residents of the colonies to help the East India Company pay its debts. It was the corporation’s tea that the Bostonians cast into the harbour.
After the revolution of 1776, the new nation set about drawing up the first constitution in the world in which ultimate authority lay with the people (though ‘the people’ at the time consisted of white male property-owners). Mindful of how corporations had colluded with the British government in the oppression of the colonies, the new government ensured that the few private companies that existed were kept on a very short lead. The power to grant corporate charters was given only to elected state legislatures, and such charters were a privilege, not a right. They were issued for a limited period and for a specific purpose. Corporations were restricted in their activities, land holdings and sometimes profits, and could not be based outside the state in which they were chartered. They were banned from involvement in politics, and stockholders and directors were held personally responsible for debts incurred or crimes committed by their institutions. Their charters could be revoked at any time if they transgressed.
Even
this wasn’t enough for many Americans, who were wary of any institutions being given enough to potentially ‘enslave’ the people again. ‘We believe,’ wrote a group of independent mechanics, opposing the creation of a new carriage corporation in Massachusetts, ‘that incorporated bodies tend to crush all [small] enterprise and compel us to work out our days in the service of others.’
But this tight lead around corporate activity was to be loosened, and finally snapped, in the nineteenth century, with the coming of both the industrial revolution and civil war. The American Civil War unleashed a great struggle for control between corporations and governing institutions. Corporate leaders, empowered by the wartime need for increased and streamlined production and the post-war demands of national reconstruction, grew richer and more self-confident. Railway corporations in particular, which operated a monopoly over this new and vital means of transport, became hugely powerful in just a few years. Emboldened by such new-found influence, corporate leaders began to call for more power, more authority and – something which the Founding Fathers would have found chilling – legal rights.
After the war, Lincoln’s fears that corporations would be ‘enthroned’ began to be realised – and the means of their coronation was to be the courts. A series of court cases, brought by corporations with the specific intent of bending the law to their advantage, saw judges granting more powers to corporations by way of generous or downright suspicious interpretations of the constitution. The most notorious court decision came in 1886 when the innocuously named Santa Clara County vs Southern Pacific Railroad case was interpreted to mean that a corporation was a ‘natural person’ under the constitution. As such, corporate lawyers began to argue, a whole slew of constitutional rights designed to ensure human freedoms should now apply to corporations too.
The consequences of this decision were enormous, and they resonate to this day. A further raft of court cases confirmed the new concept of ‘corporate personhood’, and corporations began to claim constitutional rights. The Supreme Court ruled that the fourteenth amendment to the constitution, written to guarantee equal rights to freed slaves, now gave a corporation – legally a ‘person’, after all – the right not to have its ‘privileges or immunities’ ‘abridged’. No state, says the amendment, shall ‘deprive any person of life, liberty or property without due process of law . . .’ Soon, judges all over the country were using the decision to strike down local, state and federal laws designed to protect people from corporate abuses and underlining that, in the eyes of the law, a corporation had as many rights as a freed slave – or any other American.
Of the 307 cases brought before the courts under the fourteenth amendment between 1890 and 1910, just 19 dealt with the rights of African-Americans; the other 288 were brought by corporations. By 1876, just twelve years after Abraham Lincoln had written to Colonel Elkins, another US President, Rutherford Hayes, was lamenting the coming-to-pass of Lincoln’s prophecy. ‘This is a government of the people, by the people and for the people no longer,’ he said. ‘It is a government of corporations, by corporations and for corporations.’5
After the Santa Clara case, there was no stopping the emboldened corporations. Over the next century, the courts granted corporate ‘persons’ the right under the fourth amendment (‘The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures’) to avoid government inspections without a warrant. The fourteenth amendment was used again to strike down ‘discriminatory’ corporate taxes. Under the first amendment (‘Congress shall make no law . . . abridging the freedom of speech’) corporations successfully claimed that advertising, making contributions to political candidates and spending money to influence elections could be equated with ‘free speech’. Enacting laws to prevent any of this was thus deemed an unconstitutional infringement of the free-speech rights of corporate ‘persons’. In 1976, the Supreme Court ruled that placing any limits on the amount of money corporations could donate to a political campaign would unconstitutionally limit corporate free speech.
Legally, much to the corporations’ glee, all this made perfect sense. Meanwhile, in the real world, the effects on America’s famed democracy were increasingly disastrous. Today, the results are clear. Economic and political life in the United States is dominated by fictitious corporate ‘persons’ wielding more power and influence than any real person could hope for. Corporations fund elections, own most of the media, control much of the regulatory industry set up to police them and tower over the national economy. They enjoy the support – political and often financial – of the state while circumventing many of its laws. They rake in enormous profits while taking care to incur minimum costs, whether it be through scouring the world for the cheapest labour or offloading the costs of cleaning up their pollution on to society as a whole. Their directors are protected by law from any liability for debts or crimes committed by their companies. In short: power – and profit – without responsibility.
The people, meanwhile – or that section of the people who can afford it, in this most unequal of industrialised nations – are compensated for the buying-up of their freedoms with an array of consumer goods that would have made the Founding Fathers faint with astonishment. The chances of them engaging in a national debate on the implications of all this are slim while the vast majority of the (corporate-owned) media and virtually all (corporate-funded) politicians maintain a virtual information blackout on the issue which the government of North Korea could probably learn from.
In many ways, it seems, the American people are back where they were in 1776: their lives and their government run in the interests of giant, unaccountable profit-seeking entities which have claimed the people’s rights for their own – and are slowly suffocating the meaning of their revolution.
‘Corporate personhood,’ says Jeff Milchen, thoughtfully. ‘It’s a big issue. Most people have never heard of it, but in my experience, when they do, they can’t stop thinking about it.’ He’s telling me. The more I’ve discovered about the power of corporations in the USA, the more overwhelmed I’ve become. I knew that corporations were influential in American life in a way they are probably not anywhere else on Earth – but it seems I didn’t know the half of it. Now I’m wondering whether Paul Cienfuegos’s ideal – of resubordinating corporations to the will of the people (whatever that is) – can ever be realised. Can little stabs like Measure F hope to tackle this behemoth? Or will it take another revolution to reassert the people’s will?
Jeff Milchen thinks it might; but he has a different kind of revolution in mind. Jeff lives in a small wooden house in Boulder, Colorado, with his partner and co-worker, Jennifer Rockne, and two large, mad, endearing dogs. Like Paul Cienfuegos, Jeff and Jennifer have an ambitious vision for America’s future and, like Paul, they are doing something about it. When you talk to them, you hear the same arguments, even some of the same language; Jeff, it seems, was one of Paul’s inspirations. You also hear the same sense of history – and the same appeal to resurrect the original, hard-won rights of the American people. Jeff’s organisation, ReclaimDemocracy.org, also busies itself locally to try to translate this sort of talk into some kind of reality.
‘We kind of look to the original role of corporations as a blueprint,’ says Jeff. We’re sitting in his living room, drinking beer. Jeff is slim and articulate, with black hair and a small beard which, unlike Paul’s, is under strict control. Jennifer has long brown hair, glasses, and a quick and easily deployed laugh.
‘What we had in this country over two hundred years ago makes an awful lot of sense,’ continues Jeff. ‘Strict charters, no political involvement, citizen oversight, all that stuff – it kept corporations in a place that citizens wanted them to be – subservient, not dominant. Corporations should be kept in this little box, and not let out. Reclaim Democracy grew out of this attempt to create such a long-term campaign. Our work is about creating the demand for long-term, systemic political change – rewrit
ing the relationship between people and these hugely dominant economic interests called corporations.’
What I want to know from Jeff is how this is supposed to happen. In twenty-first-century corporate America it seems a million miles away. Corporations are very big, very powerful and very dominant. Most people seem suspicious of them; most might even agree with Jeff about the problems they cause. But what are little organisations like Reclaim Democracy going to be able to do about it? Jennifer chuckles.
‘The big question,’ she says.
‘That’s part of the problem,’ admits Jeff. ‘What we’re looking for is long-term systemic change, and it’s tough to get people to focus on that. People react to the crisis of the day, from the attack on the World Trade Center to the deforestation going on in their state. It’s not that these defensive battles are unimportant, but there needs to be more strategic, long-term thinking. If you look at history, though, there are precedents. One example is the movement to abolish slavery. Back in the 1820s, when the abolitionist movement began, there were some folks who said, well, it’s not realistic to abolish slavery; it’s a huge part of our economy, it’s always been with us, people depend on it. We should pass laws to say that slaves must be treated humanely, we should have a slave-owners’ code of conduct for them to buy into. Today, there are activists with similar approaches: they say we should look for “corporate social responsibility” or demand that the Environmental Protection Agency protects the environment for us; basically trying to get corporations to cause a little less harm, and try to regulate their behaviour. The approach is similar.’ He takes a swig of beer.
One No, Many Yeses Page 29
